India on Monday Oct 022,2017 received its first ever shipment crude oil from the US, with State-owned Indian Oil Corporation Ltd importing 1.6 million barrels at the Paradip Port in Odisha.
The move comes after US resumed its oil exports last year.
The move comes after US resumed its oil exports last year.
IndianOil will process this crude at its refineries in the East: at Paradip, Haldia, Barauni, and Bongaigaon.
“IndianOil, which became the first Indian public sector refiner from India to source US crude, has placed a cumulative order of 3.9 million barrels from the US,” it said.
Public sector refiners Bharat Petroleum and Hindustan Petroleum have also placed orders from the US for about 2.95 million barrels and 1 million barrels respectively, for their Kochi and Vizag refineries.
The total volume of the crude presently contracted by Indian public sector refineries is, therefore, 7.85 million barrels. The three refiners are sourcing sweet, sour and heavy crude for their refineries which are equipped to handle complex mix of crude oils.
Indian oil companies have already invested over $5 billion in US shale assets. Indian companies have also contracted MMTPA of LNG from the US and the first shipment is expected to be delivered to India in January 2018.
The deal to source crude from the US fructified just after Prime Minister Narendra Modi’s visit to the US in June 2017
India, the world's third-largest oil importer, will import crude oil from the United States for the first time after Indian Oil Corp bought a cargo that will be delivered in October. The purchase comes after Prime Minister Narendra Modi's visit to the US in June when President Donald Trump said his country looked forward to exporting more energy products to India.
IOC bought 1.6 million barrels of US Mars crude, a heavy, high-sulphur grade, and 400,000 barrels of Western Canadian Select that will be delivered onboard a Very Large Crude Carrier
India is the latest Asian country to buy US crude after South Korea, Japan, China, Thailand, Australia and Taiwan as the countries seek to diversify oil imports from other regions after the OPEC cuts drove up prices of Middle East heavy-sour crude, or grades with a high sulphur content.
Indian refiners are seeking these heavy, high-sulphur grades as feedstocks after modifications at their plants make it easier to process these types of crudes, which typically sell at a lower cost relative to other oil types. The US could become an alternative source for the Indian companies for these grades
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